Vehicle Type Class (Typklasse)

Concept

Vehicle type class is a rating factor used in motor insurance under which a specific vehicle model is classified into one of several risk classes based on the model-specific loss experience observed for it. What is decisive here is not individual characteristics of the specific vehicle owner, but statistically observed differences between vehicle models with respect to loss frequency and loss severity.

Determining the Classification

The classification is typically carried out by an independent industry association supported by the insurance sector, based on aggregated loss data from all insurers for the respective vehicle model, with separate vehicle type classes determined for third-party liability, comprehensive, and partial comprehensive cover, since the relevant loss causes and costs vary between these coverage types. Factors such as engine power, vehicle weight, repair costs, and a model’s susceptibility to theft and vandalism feed into the assessment.

Relevance for the Premium

Alongside regional rating class and no-claims class, vehicle type class is one of the most important rating factors in motor insurance; because the classification is reviewed and adjusted annually, a vehicle’s premium can change simply due to an upgrade or downgrade of its vehicle type class, without any change in the policyholder’s individual driving behavior or loss experience.